“Simplicity is the ultimate sophistication.” Leonardo Da Vinci

The task or returning security deposits can be a tedious process. With AB 414 (Pellerin) it could simplify this task for housing providers just a little.

WHAT IS CHANGING? We now have electronic refunds to tenants as the default method. As you know, in the past we have needed to send a refund by check to the last known address within 21 days of their moving out. This could cause problems, especially with multiple tenants and potentially differing amounts. With the new law, we can refund our deposit electronically, if that is the way the tenant normally pays rent. Housing providers can also e-mail the itemized statement to a single adult tenant. Along with making one payment to a specified single adult tenant, housing providers won’t be tasked with sending multiple checks to all the tenants and getting all their forwarding addresses. In theory, this could simplify the process.

WHAT HAS NOT CHANGED? Housing providers still need to provide invoices, or a written good faith estimate for any deductible repairs. Picture before and after need to be included as well. There is also that 21 day period by which time, the security deposit and itemized statement need to be sent to the former tenant.

SUGGESTIONS. My suggestion is to specify, in writing, at the time the rental agreement is signed, who will be the person who will receive the returned funds. If there are changes during the tenancy, address them in writing as well, signed by all adult tenants. The deposit can still be delivered to multiple tenants, mailed or derived personally, as long as there is agreement in writing. As always when you document everything in the tenant’s file, you won’t forget that change that was made several years ago.

Not a major change here but unlike most of the changes we see with rental housing, this could potentially be helpful to housing providers.

“Getting older is no problem. You just have to live long enough.” Groucho Marx

What we at PRS PROPERTIES CAN DO. We can give you a good idea of the current value of your building. We can suggest changes you might want to make before sale to give you an idea what type of building you would be able to exchange into. You may decide to stay in the rental business or you may want to move into a more passive real estate investment, such as a triple net or a DSL.. We are always available to chat. We can give you referrals for professionals, such as lenders, contractors, and engineers, so that you can decide who you feel best with. We can supply you with rent and sale comparable in the area of your properties, so that you know what rental values are in your area. It is important that you know the true value of your rental units, so that you can get them rented right away at market value, or at least as much as possible with rent control restrictions. We can look at potential purchases that you may be interested in to make the property more desirable, and maybe look at potential issues that an insurer might require you to repair.

If you should decide to sell your building, we can help you exchange into a larger or smaller properties. We can even help you move into something with less management responsibilities. We can also help with getting the paperwork together for a refinance if that is your desire. We can also recommend experienced licensed contractors who can perform any repairs or installations you may need prior to selling. We can also look at your building for other easy and inexpensive changes that might allow you to get a higher value. We can help you to get the maximum value for your property, should you decide to sell, or the maximum return if you are planning to keep your building.

We are currently looking for “as-is” properties and are willing to purchase with low rents, deferred maintenance or even with a problem tenant in place. We can offer a 7 day escrow and all cash at closing. Give us a call. We have also put together numerous transactions over the years which involve properties that are not listed for sale. Many investors are currently in 1031 exchanges and need to identify a replacement property before their 45 day identification period runs out.

Should you decide to put your property on the market, we will put together an aggressive, targeted and professional campaign to get your property sold fast. We have been doing this for over 40 years, and we will use all the tools available to bring you the most dollars at closing. If you are thinking of selling or are just curious about the value of your property, don’t hesitate to give us a call.